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You're more likely to move money, check on balances, or place trades using a smartphone or tablet than an old-fashioned PC these days. But the unmatched convenience of small devices comes at a big price for the keepers of your money.

Despite huge advances in processing power and graphics, the mobile devices' screens and relative lack of horsepower require major changes in the way institutions store and manage your financial data.

State Street's approach to cloud computing could have ripple effects throughout the industry, because it's a huge provider of back-office services to other banks. That's why we poked around a little to see just what State Street is up to.

The new approach, Perretta says, means fresher information for investors -- sliced and diced in more-useful ways and delivered just about anywhere, anytime. For example, the bank's new 99-cent Springboard Apple iPhone app lets money managers track the important parameters of client portfolios on their tablets anywhere in the world.

State Street has delivered 30 other new portfolio tools for money managers to its corporate cloud this year and plans to launch 40 more before year end. Since State Street's core competency is transaction processing, its Gold Copy app is one of the most important new tools it offers: The app lets a manager follow a single "gold" version of a transaction as it moves through all of the company's many departments and office locations -- say, as it makes it way through trading, accounting, and reporting offices globally.

Sounds simple, but organization-wide consistency has been difficult to achieve under the old computing regime, says Jay Hooley, CEO of State Street. Information could get "siloed" -- trapped in one organizational segment -- or "nuanced" by software protocols or business practices that are unique to a particular department or locality.

MOST INVESTORS KNOW STATE STREET as creator of the
SPDR S&P 500SPY -0.1517882553837397%SPDR S&P 500 ETF TrustU.S.: NYSE Arca210.5
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91793648AFTER HOURS210.45
-0.05-0.023752969121140142%
Volume (Delayed 15m)
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11473209
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1.9573776722090261% Rev. per Employee
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ETF (SPY). It ignited the ETF industry in 1993 and remains the world's most popular by a wide margin. But State Street's 166 global ETFs are only its most public face. Its primary role is as one of Wall Street's top providers of transaction-fulfillment and back-office services for pension funds and other money managers. State Street's clients oversee some $23 trillion in investor accounts in 29 countries around the world.

In a cloud, information from many sources world-wide is consolidated on computer arrays figuratively "in the sky." Linked by powerful new distributed databases and virtualization software, these powerful systems can execute heavier transaction loads faster and with less duplication across the organization. State Street figures its new systems will squeeze out $600 million a year in costs out of operations.

What greater efficiency on the back end means for State Street clients, says Perretta, is more information more quickly. Highly graphical Web-oriented applications can reach smaller endpoints by parsing out irrelevant data and serving up just answers to investors request -- be they documents, pictures, or tables.

Linking all those operations doesn't come cheap. The price on State Street's makeover should exceed $100 million a year for several years. It mirrors a long IT buildout across the globe that London-based market researcher Ovum estimates will cost the wealth-management industry $35 billion a year by 2016.

But information is, after all, the fuel that Wall Street runs on, notes Hooley, and time is of the essence. The 2008-09 market meltdown persuaded State Street that it would have to answer customer requests more quickly; Perretta's cloud initiative has been the strategic answer.

"This has been a happy convergence of new technologies and client needs," says Hooley. "It has let us provide nimbler regulatory compliance, information management, and decision support."

Smaller retail financial services that don't have to accommodate State Street's giant client base have moved to the cloud even faster. Services like Mint (mint.com), Pageonce (pageonce.com), and SigFig (sigfig.com) aggregate credit-card, loan, bank, and brokerage data from many different financial firms, update it frequently, and let it be viewed in interesting new ways -- for example, tracking how much is spent on a given item or with a particular merchant.

The focus of user attention has definitely shifted from desktops to phones, notes Marc Chaikin, founder and CEO of Chaikin Stock Research (chaikinpowertools.com). Most of its customers prefer to access its quantitative stock analysis through smartphone apps, not desktop PCs.

AS AN INFORMATION AGGREGATOR, State Street has a far-reaching impact on individual investors through its work with money managers. Portfolio managers don't have to duplicate State Street's systems, many of which are too expensive for smaller firms to create or buy. Instead, they can share in them, choosing from a broad menu of scaled-up services and tools designed to help manage client portfolios.

Some, like transaction processing and data management, are broad-based. Others can be customized to a manager's preferred investing approach. One of an asset manager's most important jobs is portfolio design, and State Street's many exchange- and sector-oriented ETFs are among the most-favored vehicles for balancing asset-class exposures. The SPDR portal also offers a trio of free portfolio-building tools. The SSgA Portfolio Constructor (spdrs.com/tools/portfolioConstructor.seam), for example, gives managers access to some of the more resource-intensive routines of Modern Portfolio Theory for keeping portfolios on the efficient frontier.

Eventually, State Street will host clients' custom applications on its Web-connected servers as well, and expand its business into new areas.

"The deeper we get into it," says Hooley, "the more convinced we are that cloud computing is transformational for our company."